COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF

1 1 1 1 1 1 1 0 1 DAVID LOY (SBN ) (davidloy@aclusandiego.org) MELISSA DELEON (SBN ) (mdeleon@aclusandiego.org) JONATHAN MARKOVITZ (SBN 01) (jmarkovitz@aclusandiego.org) ACLU FOUNDATION OF SAN DIEGO & IMPERIAL COUNTIES P.O. Box 11 San Diego, CA 1-11 Telephone: (1) -1 Fax: (1) -00 CRAIG E. COUNTRYMAN (SBN 01) (countryman@fr.com) ALEKSANDR GELBERG (SBN ) (gelberg@fr.com) MADELYN S. MCCORMICK (SBN 00) (mmccormick@fr.com) FISH & RICHARDSON P.C. 0 El Camino Real San Diego, CA 10 Telephone: () -00 Fax: () -0 Attorneys for Plaintiffs LUZ VILLAFANA, UHMBAYA LAURY; v. Plaintiffs, COUNTY OF SAN DIEGO, Defendant. SUPERIOR COURT OF CALIFORNIA COUNTY OF SAN DIEGO CASE NO: COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF

1 1 1 1 1 1 1 0 1 INTRODUCTION 1. This action challenges a state-funded program that disproportionately impacts people of color and women. Unlike every other county in the state, Defendant San Diego County ( the County ) forces nearly all persons seeking welfare assistance to submit to home inspections without any reason to believe they are ineligible. The County has effective other means to verify eligibility, yet it continues to waste time and money routinely inspecting the homes of families in distress.. CalWORKs ( California Work Opportunity and Responsibility to Kids ) is the state s cash assistance welfare program. It provides a safety net for persons who may become income-eligible, including those who suffer a catastrophic loss of income due to job loss or otherwise.. For over 0 years, the County has required persons in need of CalWORKs benefits to submit to Project 0%, also known as P0, or face denial of benefits. Under P0, absent any suspicion of ineligibility, nearly all persons applying for CalWORKs benefits must submit to an unannounced home inspection by a law enforcement investigator. The investigators may interrogate applicants about matters such as child care, living, and sleeping arrangements and inspect private areas such as closets, cupboards, desks, dressers, hampers, and laundry bags.. If persons do not cooperate with P0 inspections, they face denial of their applications, leaving them destitute. When not notified when the inspections will occur, CalWORKs applicants are effectively held hostage in their homes waiting for the investigator to arrive.. Plaintiffs bring this action to compel the County to stop operating P0, which adversely impacts thousands of innocent people each year at significant waste of public funds that could be put to better use investigating actual violations of law. The County can and does verify eligibility and prevent fraud through cost-effective means that do not require indiscriminate home inspection. Plaintiffs respectfully request the Court to issue declaratory and injunctive relief to cure the County s illegal expenditure of taxpayer funds. 1

1 1 1 1 1 1 1 0 1 PARTIES. Plaintiff Luz Villafana is and at all times mentioned herein has been a citizen resident of San Diego County. Ms. Villafana owns a home in Escondido and, within the one year before the commencement of this action, has paid property taxes to the County of San Diego and the State of California for that property, and is currently assessed and liable to pay additional taxes therein.. Plaintiff Uhmbaya Laury is and at all times mentioned herein has been a citizen resident of San Diego County. She has previously applied or re-applied for public benefits under the CalWORKs program. As a condition of seeking benefits, for which she was ultimately approved, she was forced to submit to Project 0%. Within one year before the commencement of this action, she has paid sales tax, gasoline tax, or other taxes, charges, or fees routinely imposed in the County of San Diego.. Defendant County of San Diego is a public entity responsible for ensuring that the County, its agencies, officers, employees, and agents fulfill the requirements of all applicable provisions of federal and state constitutional law, statutes, and regulations with respect to the administration of public benefits, including CalWORKs. STATUTORY AND REGULATORY FRAMEWORK. Congress enacted Title IV-A of the Social Security Act to provide assistance to needy families so that children may be cared for in their own homes or in the homes of relatives. U.S.C. 01(a)(1). Public assistance funding under the Social Security Act stems from the Nation s basic commitment... to foster the dignity and well-being of all persons within its borders and is based upon the recognition that forces not within the control of the poor contribute to their poverty. Goldberg v. Kelly, U.S., - ().. CalWORKs is the state analog to the federal Temporary Assistance for Needy Families ( TANF ) program, formerly known as Aid to Families with Dependent Children ( AFDC ). AFDC was established by Title IV-A of the Social Security Act of 1, Stat., as amended, U.S.C. 01-.

1 1 1 1 1 1 1 0 1. CalWORKs exists for the benefit of all otherwise qualified California families to provide a safety net for anyone who might become income-eligible due to job loss or otherwise.. To receive CalWORKs benefits, a family must be income-eligible. A family of three in San Diego County, for example, must have no more than $1, in net monthly income. See California Department of Social Services. All County Letter No. 1-, California Work Opportunity And Responsibility To Kids (CalWORKs): Cost Of Living Adjustment (Cola) Increase To The Minimum Basic Standard Of Adequate Care (MBSAC) Levels, May, 01 at ; Manual of Policies and Procedures: Eligibility and Assistance Standards ( MPP ) -0. 1. California counties administer the CalWORKs program within their respective localities in conformity with state rules and regulations. CAL. WELF. & INST. CODE 0, 0. 1. The basic purpose of the [benefits] application process is to assist the individual in establishing his/her eligibility for aid and services. MPP 0-.1. Gathering the requisite evidence to make an eligibility determination is a joint responsibility of the applicant and the county. MPP 0-1.1. The county requires the applicant to produce only evidence necessary to determine past or present eligibility for the amount or delivery of aid. MPP 0-.1. 1. The regulations spell out the Steps in the Application Process to determine eligibility for aid. See MPP 0-.. Initially, an applicant discusses with an eligibility worker the circumstances that have led to the application. MPP 0-.. The eligibility worker, in turn, explains the agency requirements, program limitations, [his/her] rights and responsibilities and what he/she can expect from the agency. Id. 1. The applicant completes a Statement of Facts form, which is signed under penalty of perjury. MPP 0-., 0-.1. The application is submitted to the Applicant System component of the state s Income Eligibility Verification System ( IEVS ), administered by the Department of Health Care Services. See MPP 0-.. 1. The IEVS is a federally-mandated system consisting of a coordinated data exchange among various databases including but not limited to [w]age information from the State

1 1 1 1 1 1 1 0 1 Wage Information Collection Agency [u]nemployment/disability compensation benefits from the agencies administering those programs [b]enefits/pensions/wage information from the Social Security Administration [i]nternal Revenue Service (IRS)/Franchise Tax Board (FTB) unearned income data Social Security number (SSN) verification information from SSA; and [i]nter/intra-county duplicate benefit matches. MPP 0-00.. 1. The County must submit specific identifying information to IEVS for each CalWORKs applicant, such as, but not limited to, name, SSN [and] date of birth. MPP 0-00.. The County shall input applicant data into IEVS at the first available opportunity but no later than five working days after the signed statement of facts is completed. MPP 0-00.. The County shall use information obtained through the IEVS for the purposes of [v]erifying the applicant s/recipient s eligibility [and v]erifying the proper amount of benefits. MPP 0-00.. 1. After the application is submitted, the applicant is required to, among other things: (a) complete all documents required in the application process; (b) provide all documents in her possession which are needed to determine eligibility; (c) report all facts the applicant believes to be material to her application or which the county has identified as affecting eligibility; (d) report any change in these facts within five calendar days of the change; (e) identify any third party who may be liable for care and services; and (f) identify any other family member required to be in the assistance unit. See MPP 0-.-.1; CAL. WELF. & INST. CODE. 0. Once applicants have been enrolled, they are subjected to ongoing eligibility verification through IEVS. See California Department of Social Services, Income and Eligibility Verification System, http://www.cdss.ca.gov/fraudextranet/pg.asp. Every quarter the [County] shall submit to IEVS income and eligibility information on each recipient of CalWORKs. MPP 0-00.1. 1. In addition to using IEVS to verify applicant eligibility and proper benefits amount, the County shall use information obtained through the IEVS for [d]etermining whether a recipient

1 1 1 1 1 1 1 0 1 received benefits to which he/she was not entitled and where appropriate, [c]onducting criminal or civil prosecutions. MPP 0-00.. Among other measures designed to prevent fraud is the requirement that each adult in the household submit fingerprints that can then be checked through the Statewide Fingerprint Imaging System. MPP 0-... Meanwhile, the eligibility worker begins the process of compiling acceptable evidence to verify the linking and nonlinking factors of the applicant s eligibility for aid. MPP 0-.. The regulations set forth in considerable detail what constitutes acceptable evidence for each such factor. See, e.g., MPP -1.1 (regarding proof of age); and MPP -0 (regarding proof of residence).. A face-to-face interview with the applicant is required prior to the granting of aid. MPP 0-11.. This interview by the eligibility worker must cover a long list of topics, including the applicant s obligation to report all facts material to a correct determination of eligibility and the grant amount, the joint responsibility of the county and the applicant for exploring all the facts concerning eligibility, and the kinds of evidence which may be needed to establish eligibility. MPP 0-11... Within ten calendar days of application, the county must give written notice to the applicant of any required evidence and examples of alternative evidence, if any, to determine eligibility. MPP 0-.. The county shall, however, assist the applicant in obtaining any such evidence concerning eligibility from a third party if the applicant has made a good faith effort to obtain such evidence but did not succeed due to the third party s failure or refusal to provide the necessary information. MPP 0-.1. Moreover, the county shall not deny an application for failure to provide evidence of eligibility if the county has determined that the applicant is continuing to cooperate by attempting to comply in obtaining necessary evidence. MPP 0.... The state has prescribed the methods of gathering evidence of eligibility. See MPP 0-1.. Throughout the entire application process, the county must inform the applicant what

1 1 1 1 1 1 1 0 1 evidence is desired, why it is needed and how it will be used. MPP 0-1.; see also MPP 0-.. The applicant, on the other hand, must agree to participate in, and cooperate with the county in the evidence gathering process to the fullest extent possible. MPP 0-1.; see MPP 0-.1, 0-.. When it is not possible for the applicant to obtain necessary evidence, the county shall obtain it for him. MPP 0-1.1. When evidence is conflicting, inconsistent or incomplete, the investigation shall be pursued to the point that the preponderance of evidence supports the determination regarding the applicant s eligibility. MPP 0-1.1.. State regulations require a home visit only when living arrangements or other factors affecting eligibility, or apparent eligibility in cases of immediate need or diversion, cannot be satisfactorily determined without such a visit. MPP 0-11. STATEMENT OF FACTS. CalWORKs is a state-funded program or activity, or a program or activity that receives state financial assistance, of which P0 is a part.. To the extent it could be considered a program or activity separate from CalWORKs, P0 is a state-funded program or activity, or a program or activity that receives state financial assistance. 0. With approval of the County Board of Supervisors, P0 began in 1 as a pilot program proposed by the District Attorney s office and the County Department of Social Services, ostensibly to increase efforts in Welfare Fraud prevention at the point of intake. Board of Supervisors Minute Order No., April, 1; AFDC Program Guide, Special Notice (hereafter Special Notice ) -0 at 1. 1. Effective January, 1, the County expanded P0 to require home inspections for all new applications that were not deemed obvious denials. Special Notice -0 at 1.. P0 investigators are and have always been licensed peace officers. They previously worked out of the District Attorney s office. Currently they are assigned to the Public Assistance Fraud ( PAF ) division of the Department of Child Support Services ( DCSS ).

1 1 1 1 1 1 1 0 1. In San Diego County, all applications for CalWORKs benefits that are not denied outright are referred to PAF under P0, regardless of whether the applications present any reason to suspect ineligibility or fraud.. Apart from P0, the County also conducts investigations of specific individuals suspected of committing welfare fraud, knows as allegation-based or referral-based investigations. The lawfulness of allegation-based or referral-based investigation is not challenged in this action.. Upon receipt of a P0 referral, a PAF investigator makes an unannounced attempt to investigate the applicant at the address listed on the application. Special Notice -0 at. If no one is home, the investigator is supposed to leave his or her business card. See id.; County of San Diego CalWORKs Program Guide 0-000.B... If the applicant is not home when the second home call attempt is made, another business card will be left with a note on it for the applicant/recipient to call the investigator. County of San Diego CalWORKs Program Guide 0-000.B... The notice sent to CalWORKs applicants concerning P0 indicates that the purpose of the investigation is to verify the facts related to your application for CalWORKs, and states that County policy requires that the investigation be completed... prior to approving ongoing CalWORKs benefits.. Because applicants are typically not notified when the investigation will occur, they must often remain effectively confined to their homes awaiting an unannounced and unscheduled visit. As a result, they may be effectively required to postpone job searches, skip medical appointments, and stop taking children to and from school for fear of suffering denial of income necessary to feed their families.. If the applicant is at home, the investigator seeks entry into the home and questions the applicant and others who may be in the home. The interrogation may address a variety of subjects, including matters unrelated to eligibility or that have already been documented and

1 1 1 1 1 1 1 0 1 verified during the application process, including but not limited to child care, living, and sleeping arrangements. 0. The investigation may involve an inspection of the applicant s home, which may entail viewing, among other things, the contents of private rooms, closets, cupboards, desks, dressers, hampers, laundry bags, and other areas or items not in plain view. 1. If the investigator s attempts to contact the applicant are unsuccessful, or if the applicant does not submit to the P0 investigation, the application for benefits is denied.. According to recent data, 0.% of San Diego County CalWORKs recipients are Hispanic, while 1.% are African American.. Recent data show.% of the County s general population is Hispanic, and only.% is African American.. Recent data show adult women represent.% of enrollees in San Diego County s CalWORKs Welfare-to-Work ( WTW ) program.. Recent data show adult women represent % of the County s general population.. On information and belief, because nearly all CalWORKs recipients are required to participate in the WTW program, with very narrow exemptions, the WTW program s demographics mirror or closely resemble those of the CalWORKs recipient pool.. The County currently employs several PAF investigators who spend a substantial amount of their time on P0 investigations based on unsubstantiated suspicion that an applicant violated any law. That time could be redirected to investigating suspected violations of law, including but not limited to fraud, perjury, embezzlement, [and] trafficking. MPP 0-00... No other county in California operates a program similar to P0. Instead, other counties investigate claims of fraud based on individualized suspicion of applicant fraud rather than conducting indiscriminate home inspections of all applicants.. Los Angeles County previously operated a program modeled on P0, but it abandoned the program in or about 00.

1 1 1 1 1 1 1 0 1 0. Counties with CalWORKs caseloads of 1,000 cases or more are required to develop and administer fraud investigation programs administered by special investigation units ( SIUs ), which are distinct from county units performing eligibility and benefit determination functions. MPP 0-00.1, 0-00.1. Counties with smaller caseloads may maintain an SIU, but if they do not, they must designate one employee to be responsible for the referral of suspected fraud cases to the prosecuting authority for investigation. MPP 0-00.. 1. SIUs shall be established and organized for the purpose of investigating suspected welfare fraud, and shall [i]nvestigate any activity, particularly during intake, which may constitute welfare fraud. MPP 0-00.1, 0-00.1.. The administration and operation of P0 cause a disproportionate adverse effect on the basis of race, color, national origin, ethnic group identification, or sex.. P0 is not justified by any legitimate governmental interest in fraud prevention. The costs of operating P0 exceed any savings arising from prevention of any fraud detected through the program.. Even if P0 were justified by any legitimate governmental interest in fraud prevention, any such interest can be better served through other means that cause less disproportionate adverse effect on protected classes, including but not limited to the use of existing procedures for verifying eligibility for CalWORKs benefits and allegation-based or referral-based investigations. CAUSE OF ACTION FOR ILLEGAL OR WASTEFUL EXPENDITURE OF PUBLIC FUNDS IN STATE-FUNDED PROGRAM OR ACTIVITY BY ALL PLAINTIFFS AGAINST DEFENDANT COUNTY UNDER CAL. GOV T. CODE 1 AND CAL. CODE CIV. PROC. (A). Plaintiffs incorporate herein by reference each and every allegation set forth in Paragraphs 1-, above, as if set forth in full.. No person in the State of California shall, on the basis of sex, race, color, religion, ancestry, national origin, ethnic group identification, age, mental disability, physical disability, medical condition, genetic information, marital status, or sexual orientation, be unlawfully denied full and equal access to the benefits of, or be unlawfully subjected to discrimination under, any

1 1 1 1 1 1 1 0 1 program or activity that is conducted, operated, or administered by the state or by any state agency, is funded directly by the state, or receives any financial assistance from the state. CAL. GOV T. CODE 1.. Section 1 and its implementing regulations, Cal. Code Regs. 10 et seq., are enforceable by a civil action for equitable relief. CAL. GOV T. CODE 1.. The County s administration of CalWORKs, of which P0 is a part, is a program or activity subject to 1 and its implementing regulations.. In the alternative, P0 is a program or activity subject to 1 and its implementing regulations. 0. Section 1 and its implementing regulations prohibit disparate impact discrimination in the operation of any program or activity that is funded directly by the state, or receives any financial assistance from the state. 1. In carrying out CalWORKs and P0, the County is violating 1 by causing a disproportionate adverse effect on the basis of race, color, national origin, ethnic group identification, or sex.. In carrying out CalWORKs and P0, the County is violating Cal. Code Regs. 1(i) because it is using criteria or methods of administration that (1) have the purpose or effect of subjecting a person to discrimination on the basis of ethnic group identification, sex, or color; and/or () have the purpose or effect of defeating or substantially impairing the accomplishment of the objectives of the CalWORKs program with respect to a person of a particular ethnic group identification, sex, or color.. The County s policies, practices, and actions as stated in this complaint constitute an illegal or wasteful expenditure of public funds justifying an injunction under CAL. CODE CIV. PROC. (a).. There is no adequate remedy at law if the requested injunction does not issue to prevent the illegal or wasteful expenditure of taxpayer monies.

1 1 1 1 1 1 1 0 1. There exists a real and present controversy between Plaintiffs and Defendant regarding the implementation of P0 and the administration of CalWORKs in San Diego County. Plaintiffs contend that the actions of Respondents complained of in this complaint violate the law as specified above. Plaintiffs are informed and believe that Defendant contends to the contrary. PRAYER FOR RELIEF WHEREFORE, Plaintiffs pray that this court: 1. Issue a declaratory judgment that P0 is invalid because it constitutes an illegal form of disparate impact discrimination within the meaning of CAL. GOV T. CODE 1 and its implementing regulations;. Issue a declaratory judgment declaring that P0 is invalid because it constitutes an illegal or wasteful expenditure of public funds;. Issue a permanent injunction restraining Defendant and its officers, agents, servants, employees, representatives, all persons acting in concert with, at the direction or, in combination with, or participating with them, and other persons subject to their authority or control, from implementing in any way any provision of P0;. Grant costs of suit to Plaintiffs;. Award reasonable attorney fees to the extent permitted by law;. Grant such other and further relief as the Court deems just and proper. Dated: June, 01 Respectfully submitted, By: DAVID LOY (SBN ) (davidloy@aclusandiego.org) JONATHAN MARKOVITZ (SBN 01) (jmarkovitz@aclusandiego.org) Melissa Deleon (SBN ) (mdeleon@aclusandiego.org) ACLU FOUNDATION OF SAN DIEGO & AND IMPERIAL COUNTIES P.O. Box 11 San Diego, CA 1-11 Tel: (1) -1 Fax: (1) -00 E-Mail: davidloy@aclusandiego.org CRAIG E. COUNTRYMAN (SBN 01)

(countryman@fr.com) ALEKSANDR GELBERG (SBN ) (gelberg@fr.com) MADELYN S. MCCORMICK (SBN 00) (mmccormick@fr.com) FISH & RICHARDSON P.C. 0 El Camino Real San Diego, CA 10 Telephone: () -00 1 1 1 1 1 1 1 0 1